UPS earnings: UPS first quarter earnings: United parcel service to cut 20,000 jobs, shutting down 73 sites amid Amazon withdrawal, economic uncertainty

United Parcel Services (UPS) has announced plans to lay off 20,000 jobs and close 73 leased and owned facilities by June 2025. The move is because it aims to reduce the number of packages to Amazon, the largest customer. They account for nearly 12% of their revenue in 2024.The slow economic environment also affected the decision to announce these further layoffs. In 2024, their 12,000 employees were fired.
According to media reports, UPS expects to save nearly $3.5 billion this year by reducing labor, building closures, automation and asset sales. In 2025, separation of benefits and rental-related costs may range between $400 million and $600 million.

Amazon volume and tariffs impact growth

Bloomberg’s report noted that UPS revealed in January that Amazon’s low profit margins will be cut by more than half over the next 18 months.

The company also faces other challenges facing new U.S. tariffs that will come into effect on May 2, which will affect e-commerce imports from low-cost Chinese retailers such as Temu and Shein. These changes are expected to further reduce parcel volume.

UPS CEO Carol Tomé told Reuters that cost-cutting measures are appropriate given the current macroeconomic difficulties. These challenges stem from a shift in trade policy under President Donald Trump, who demonstrated global trade and increased supply chain volatility.Also read: Is Bluesky lowered? X competitors face widespread disruption

First quarter results ratio estimate

Despite the bleak outlook, UPS reported better first-quarter results than legacy. Revenue fell slightly to $21.5 billion, but the forecast on Wall Street was $21.05 billion. Analysts predict adjusted EPS of $1.38 but adjusted EPS of $1.49. Domestic operations in the U.S. grew 1.4% to $14.46 billion, and even with a decline in volume, it also improved in the quantity and revenue of air cargo.
Stocks rose 4.6% in previous market trading on Tuesday after reporting earnings.

Turn to high-profit logistics

Staying away from low-profit delivery, UPS positiones itself as a professional logistics company, especially in the healthcare sector. Recently, it reached an agreement to pay $1.6 billion to acquire Canadian company Andlauer Healthcare Group Inc. with the goal of increasing healthcare-related revenue to $20 billion by 2026.

Despite its previous full-year revenue forecast of $89 billion and operating margin of 10.8%, UPS refused to modify its 2025 forecast due to economic uncertainty. The company will release its second-quarter updated guide later Tuesday.

FAQ

1. Why does UPS eliminate 20,000 jobs?
UPS is shrinking its size because its packaging volume, especially from Amazon, is falling, and it needs to be cheaper in a world of economic uncertainty and economic uncertainty affecting trade and e-commerce and higher tariffs.

2. What are UPS’s future plans?
UPS focuses on high-profit logistics sectors including healthcare. It recently acquired a Canadian health care logistics company and plans to increase it from the business to $20 billion by 2026.